Foreign Exchange Rates : GBP EUR and GBP USD Rates Drop on Release of Bank of England MPC Minutes

19 May 2011 at 5 AM - Written by John Cameron

STORY LINK Foreign Exchange Rates : GBP EUR and GBP USD Rates Drop on Release of Bank of England MPC Minutes

The Pound Euro exchange rate (GBP EUR) is 1.1319. The Pound Dollar exchange rate (GBP USD) is 1.6180. The Pound Australian Dollar exchange rate (GBP/AUD) is 1.5171.

Sterling endured a dismal day on the currency markets yesterday, losing ground against all of the sixteen most actively-traded currencies.

The day started badly for the Pound, with the release of labour market data at the start of the European session which showed a rise of 12,400 in the number of UK workers claiming unemployment benefit. Analysts had expected there to be no increase in the number of claimants.

Sterling came under further selling pressure with the release of the minutes of May’s Bank of England Monetary Policy Committee meeting. The minutes revealed that, once again, only three of the nine members had voted to raise UK interest rates.

With one of these hawks, Andrew Sentance, leaving the MPC before its next meeting, it looks likely that seven members will be voting to maintain interest rates at their record low of 0.5% at the next meeting.

Elsewhere, the US Dollar’s recent march forward continued, with the GBP USD exchange rate trading down from close to 1.6300 at the start of the day to touch 1.6105 by the middle of the European session. However, Dollar-strength may be short-lived, as global equities markets signalling a pick-up in appetite for risk; the FTSE 100 closed 1.04% up on the day and the benchmark S&P500 gaining 0.88% on the session.


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